Income Tax
Income Tax
Income tax considerations are an important part of wealth planning.
Understanding the income tax rules that apply to you and your assets can help you make informed decisions for your own wealth plan.
Income tax overview
The Tax Cuts and Jobs Act, signed into law on December 22, 2017, provided tax benefits in the form of fewer tax brackets and generally lower rates of tax and an increase in the standard deduction. However, it also curtailed or eliminated a number of tax deductions that have been a familiar part of the tax landscape for years.
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The Medicare surtax
Beginning in 2013, a 3.8% Medicare surtax* has been imposed on certain passive investment income of individuals, trusts and estates based on a mathematical formula. For taxpayers to be able to reduce the impact of the tax, they must first understand to which income it applies and how the tax is calculated.
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Federal income taxation of trusts
A common question for a grantor or a beneficiary of a trust is: “How will income in my trust be taxed?” Unfortunately, the answer to that question can be complex, because it is dependent on many factors, including the type of trust, the rights of the beneficiaries under the trust, and the activity in the trust during the tax year.
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Please contact a CIBC Private Wealth advisor for more information.